Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted tax bases: FMV Adjusted Tax Basis Inventory $ 72,000 $ 36,000 Building 540,000 360,000 Land 828,000 1,080,000 Total $ 1,440,000 $ 1,476,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $1,340,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Problem 19-40 Part g (Algo) Assume the corporation assumed a mortgage of $1,540,000 attached to the building and land. Assume the fair market value of the building is now $900,000 and the fair market value of the land is $1,908,000. The fair market value of the stock remains $1,340,000. g. What is the corporation’s adjusted tax basis in each of the assets received in the exchange? (Do not round intermediate calculations.) adjusted basis:inventory building land
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted tax bases:
| FMV | Adjusted Tax Basis | |
|---|---|---|
| Inventory | $ 72,000 | $ 36,000 |
| Building | 540,000 | 360,000 |
| Land | 828,000 | 1,080,000 |
| Total | $ 1,440,000 | $ 1,476,000 |
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $1,340,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
Problem 19-40 Part g (Algo)
Assume the corporation assumed a mortgage of $1,540,000 attached to the building and land. Assume the fair market value of the building is now $900,000 and the fair market value of the land is $1,908,000. The fair market value of the stock remains $1,340,000.
g. What is the corporation’s adjusted tax basis in each of the assets received in the exchange? (Do not round intermediate calculations.)
adjusted basis:inventory building land
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